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Take the Guess-work Out of Tax Forms

    

SUMMARY: Believe it or not, tax season will be here before you know it! Many folks dread tax season, and we understand how confusing it can be! TDECU sends Members letters each year for types of tax documentation.

Not every Member will receive a form, but if you do receive a form and you’re not sure what it means, it can lead to confusion and frustration! Let us help you take some of the guesswork out by explaining what many common tax forms are for and what to do with them. Below we’ll list the names of the forms we send out, and an explanation for what each form means. We hope you have a stress-less tax season! As always, please contact us with any questions or concerns, we’re here to help!

tax time-320 (1).jpg1098- Mortgage Interest: Use Form 1098 to report mortgage interest of $600 or more received by you during the year in the course of your trade or business from an individual, including a sole proprietor.*

1098- Business Interest: File this form if you are engaged in a trade or business and, in the course of such trade or business, you receive from an individual $600 or more of mortgage interest on any one mortgage during the calendar year.*

1099 INT- Interest on Escrow: Your 1099-INT statement includes the total amount of dividends paid to you by TDECU in 2017.

1099 INT- Interest & Backup Withholding: Backup withholding is withholding that is taken from certain forms of payments and income by businesses and banks. If you are paying individuals and reporting those payments on a 1099 form, you might be required to withhold taxes from some of these individuals, as backup withholding. Your 1099-INT statement includes the total amount of dividends paid to you by TDECU in 2017.  Note: Only Members who have earned dividends in aggregate of $10.00 or greater will receive a 1099-INT.

1099 MISC- Miscellaneous Income: This form is provided by employers to contract workers (who may be independent contractors or other non-employees) to report payments made during the year. A 1009-MISC applies to anyone who has been paid $600 or more during the year.

1099 C- Charge-off Debt: When creditors have canceled a debt, they’re required to report the amount of debt canceled, if the amount is over $600. The IRS considers this canceled debt as a form of income, and you are required to report the amount over $600.

1099 Q- Payments from Qualified Education Plans: If you or someone in your family has contributed to a 529 plan or a Coverdell Education Savings Account. If you are the beneficiary, you will receive this form once the funds are being used. You will need to include the amounts it reports on your tax return.

1099 R – Distributions (IRA, 401k, etc.): This form is used to report the distribution of retirement benefits such as pensions, annuities or other retirement plans. There are several variations of this form, but you will receive this form if you received more than $10 from your retirement plan.

Hopefully this has helped clear up some of the tax form questions you may have. We know it’s a tedious process that isn’t always the most fun, but necessary! Please contact us or visit www.tdecu.org for more information.

Sources:

https://www.irs.gov/forms-pubs/form-1098-mortgage-interest-statement

www.thebalance.com

 

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